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By Daniel J. Schulte
MDA Legal Counsel
Published in the February 2007 issue of the Journal

Question: I am experiencing a few problems with some dental insurance plans with which I participate. One wants to audit charts of my patients who are not enrolled in that plan. A different plan I participate with administers a local employer’s self-funded dental plan and insists that I limit my fees to its fee-schedule amounts for services I provide to patients in the plan. A claims representative at a third dental insurance plan, which I don’t participate with, told me if I deposited the plan’s check (endorsed by a patient in that plan), I wouldn’t be able to bill or collect the balance owed from the patient.

Answer: I will respond to these issues one at a time. However, the common theme running through each response is this: In order for any dental insurance plan to impose any binding obligation on you there must be a contract containing the obligation between you and the dental insurance plan.

Most participation agreements with dental insurance plans will include the right of the plan to audit the charts of patients for which you have provided services and billed the plan. Patients enrolled in the plan are likely on notice directly from the plan that such audits may be conducted in the ordinary course of the plan’s operations. The HIPAA Privacy Rule will not prevent you from making a disclosure of this information to the plan. HIPAA allows disclosures of patient information for the purpose of treatment, payment or health care operations (assuming you have posted your Notice of Privacy Practices and made a good faith attempt to obtain the patient’s signature on an acknowledgement of receipt of a copy of the Notice).

Your disclosure of the records of a patient enrolled in the plan would fit within either the payment or health care operations category. The charts of patients who are not enrolled in the plan conducting the audit would require a written authorization from the patient first, since the purpose of the disclosure is unknown. In addition to the HIPAA authorization requirement, your contract with the plan must expressly require you to allow the plan to audit charts of any of your patients.

You asked whether a dental insurance plan with whom you have contracted can require you to limit fees charged to patients enrolled in another plan (for instance, a self-funded dental plan created by a local employer) with whom you do not have a contract, just because the plan provides administrative services to the self-funded plan. This depends on whether your contract contains such an obligation. The terms of your contract must expressly state that you are agreeing to charge only the fee schedule amount not only for those patients enrolled in the plan but for any patient in your practice. Insurance plans sometimes insist that you not charge more than the lowest fees you charge any other plan. This fee limitation would also have to be stated in your contract with the plan. These provisions are sometimes called "most favored nation clauses."

The resolution of the final issue will depend upon whether there is waiver or assignment language on the plan’s check or some document that comes along with the check. There at times is a notation on the check itself or an accompanying document stating that by accepting the patient-endorsed check you are waiving any right that you may have to balance-bill the patient or are accepting an assignment of the patient’s plan benefit as payment in full for your services. If this is the case and you wish to balance-bill the patient, simply require the patient to cash the check and pay you your full fee. If, however, no such statement is on or accompanies the dental insurance plan’s check, the act of depositing the patient’s endorsed check will only be construed as a partial payment of your fee.

There is no excuse for not reading and understanding all of the terms of contracts you sign. As you can see, in the managed care/insurance plan arena, there are several traps that dentists can fall into by not reading and understanding their contracts.

Posted in: Insurance

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